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Home / News / NCH costs hit €2.2bn with Govt ‘not allocating any more’

NCH costs hit €2.2bn with Govt ‘not allocating any more’

Taoiseach Leo Varadkar has told the Dáil that €2.2bn is the maximum allocation for the completion of the National Children’s Hospital, adding that the Government “will not be allocating any more”.

It comes after Minister for Health Stephen Donnelly informed Cabinet this morning that the cost of the hospital has increased by over €512 million, to €2.24 billion.

Included in this are the design, build and equipping costs of €1.88bn, and a separate €360m for the integration and transition of services to the hospital.

Mr Varadkar said that construction will be completed “later this year” and the hospital will be open and treating children “next year”, stating it will be “comparable if not superior” to hospitals across the EU.

The Taoiseach was replying to Sinn Féin leader Mary Lou McDonald who described the projected cost of €2.2bn as “staggering”, and added she had “no confidence” this will be the final cost.

The hospital will be open and treating children ‘next year’, Leo Varadkar said

She said the delivery of the project was a “fiasco”, while “children wait in agony for life changing treatments.”

Ms McDonald contended that the hospital’s ballooning costs proves that the entire Government was “asleep at the wheel.”

Mr Varadkar said that he looked forward to the hospital opening next year, adding that it would have more theatres, more scanners, and more facilities than people could imagine.

He said that of the €2.2bn total, €1.4bn had already been drawn down, adding that it was important to remember that the costs included satellite offices in Tallaght and Blanchardstown, as well as decommissioning Crumlin and Temple Street Hospitals, and financial consequences associated with the examination of building the hospital at the Mater site in central Dublin.

Speaking earlier on RTÉ’s News at One, Stephen Donnelly said the new total cost included €40m sanctioned in December and that “in the lifetime of this Government, there will be no memo seeking additional funding”.

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“But the amount we have put in here today, includes forecast from the development board as to the full and final cost of this,” he said.

In a statement, a spokesperson for BAM spokesperson said the company’s “primary focus is on the timely delivery of the New Children’s Hospital and is fully committed to this end”.

The spokesperson said BAM is also “fully resourced within the scope agreed” to complete the hospital.

“We will continue to work closely with the National Paediatric Hospital Development Board and the Government, confident in the knowledge that this hospital will leave a lasting positive legacy for the children of Ireland,” the spokesperson added.

The original estimated cost was €650m in 2015.

The hospital is estimated to be at over 90% completion and minister said the new hospital is due to be completed by 29 October and, following six months of operational commissioning, open in “April or May 2025”.

Last November, the National Paediatric Hospital Development Board submitted the final cost estimate to the Government on the project, which the project director said could not be released due to commercial sensitivity.

The original estimated cost of the hospital was €450m

The minister said that in 2018 the agreed amount was about €1.7bn but additional costs were identified by PWC in 2019.

“This now is Government funding those costs, plus costs associated with Covid-19, the site being closed for a number of months which added costs, also a combination of Covid-19 and the war in Ukraine that has increased significantly building inflation and those costs fall to the State”.

He added that the board felt that the project not being fully resourced was also a cause for delay.

In 2020, the Government allocated very significant additional funding to the development board to manage the project as well as possible and to defend claims, he said.

He said that €770m in claims had been put forward by the contractor but the adjudicator only awarded 2.7% of claims in favour of the contractor by value, which amounted to €645m.

He said that the contractor had the right to escalate this in the courts, as there is about €125m to be adjudicated on and that within the additional funding agreed today is an amount against a final settlement and contingency funds.

Mr Donnelly said the project was frustrating but “we are getting a huge amount in return for that money in terms of children’s healthcare, this is going to be transformative”.

“There are no projects that won’t go ahead” as a result of the additional costs, Mr Donnelly said, adding that the department was being “more ambitious” in other areas of healthcare such as investing in primary health care and injury units.

Minister for Public Expenditure and Reform Paschal Donohoe said the State is making every effort to get value for taxpayers when it comes to completing the hospital.

He said “along the way” there have been significant issues that have had to be dealt with around costs and the transparency of those costs.

Additional reporting Mícheál Lehane

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